Domino’s CEO announced he will be departing, Papa John’s CEO just left and Papa Murphy’s CEO is still listening to franchisee so the oldest legacy national pizza brand that has capitulated market share for 20 years is stepping up. So what do you think they are doing now?
Well according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® “under the skillful tutelage of Yum! Brands CEO Greg Creed Pizza Hut will be empowered to leverage product innovation, pricing, and marketing acumen to position Pizza Hut with top-of-mind customer relevance driving top line sales and bottom line profits.
Pizza Hut announced its $5.99 Medium Two-Topping pizza deal, the first of its kind for the Yum! Brands chain. Pizza Hut is targeting its primary target customers while firing a warning shot to the pizza sector they mean to garner market share in 2018 as they leverage price to gain a larger share of stomach according to Johnson.
Zipporah Allen, vice president of marketing for Pizza Hut stated "Great tasting pizza at a great price is a no-brainer,” ... “We know our pizza stands above the rest, so we’re excited to give our customers an offer to satisfy their craving.”
According to Johnson, McDonald’s success with deliver help expand the food delivery space all the while empowering consumers to choose something other than pizza as a first choice for the office get together, family meal, or student non-traditional meal leaving the pizza sector a bit flat footed.
The consumer is dynamic not static and clearly Yum! Brands CEO Greg Creed understands that the retail foodservice business model is evolving fast and brands must evolve as fast or fasters according to Johnson. In fact Pizza Hut announced a global partnership with Toyota to look at the future of pizza delivery with a self-driving car the Toyota E-Palette.
Let’s be clear here the foodservice space is evolving very fast, as regular readers of this blog know department store chain Kohl’s is planning to partner with retailers like convenience stores or grocery stores to lease the white space left by the roughly 300 stores it has “right-sized” over the past several years, CEO Kevin Mansell told CNBC just yesterday. Let’s admit it, most retailers know that Grocerant niche fresh food is booming. That was just in case you missed it according to Johnson. That is the a contributing force driving restaurant chains to evolve or fade away if they want to admit it or not.
Johnson believes legacy restaurants must invest in garnering segment market share in 2018 any way they can because the fast evolving retail foodservice business model is going to displace those who do not. By now you know that Walmart & K Mart raised both wage and employee benefits. The increases to $11 per hour while simultaneously expanding maternity and parental leave benefits have elevated the restaurant employee retention and acquisition problem to a new high, one where yesterday’s solutions are today’s quagmire.
The undercurrents conditions impacting the growth of the foodservice sales have been well documented by the team at Foodservice Solutions®. We ask is your restaurant, c-store, or service deli prepared for today’s retail conditions or yesterdays. Why do we ask?
Well, recently we spent time listening to many foodservice CEO’s talk about implementing delivery as a strategy. It’s kind of like thinking restaurant delivery is the answer to sales woes. Restaurant food delivery is integral and maybe required in-order to maintain customer relevance today. However we must caution operators that food delivery as a strategy was valuable 20 years ago. Today, food delivery is simply a marketing tactic of yesterday.
Today food delivery is simply a tactic being implemented by followers who were unable or unwilling to see the forest through the trees back in the day or last year. It must be noted if a food company is touting food delivery as a strategy the only thing clear is that they still don’t see the forest as the weeds they are standing in are simply too high according to Johnson.
In Q4 2017 restaurant same-store traffic declined 1.9% in the fourth quarter, including a 1.8% decline in December after very weak numbers in 2016. That my friends is an example once again that the restaurant business model is broken. Has your brand created a new platform capable garnering incremental customers and sales while driving store cost down edifying the franchisee while driving corporate profit? Why not?
Success does leave clues www.FoodserviceSolutions.us is the global leader in grocerant niche business development. We can help you identify, quantify and qualify additional food retail segment opportunities. Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation? Want one? Call 253-759-7869 Email: Steve@FoodserviceSolutions.us